HBA-RBT H.B. 3461 76(R) BILL ANALYSIS Office of House Bill AnalysisH.B. 3461 By: Madden Elections 3/29/1999 Introduced BACKGROUND AND PURPOSE Concerns have been raised about political campaign finance, resulting in calls for reforms. H.B. 3461 provides public access to all relevant information regarding all individuals and organizations who give or spend campaign dollars by requiring timely disclosure and electronic filing of such contributions and expenditures. RULEMAKING AUTHORITY It is the opinion of the Office of House Bill Analysis that this bill does not expressly delegate any additional rulemaking authority to a state officer, department, agency, or institution. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 251.001, Election Code, by amending Subdivision (13), and adding Subdivision (21), to redefine "specific-purpose committee" and define "principal political committee of a candidate or officeholder." SECTION 2. Amends Subchapter A, Chapter 251, Election Code, by adding Section 251.010, as follows: Sec. 251.010. PRINCIPAL POLITICAL COMMITTEE. Requires a candidate or officeholder to designate in writing a political committee to serve as the person's principal political committee. Provides that the designation must be made within 15 days of the day the person becomes a candidate or officeholder and must be filed with the proper authority. Prohibits a candidate or officeholder from having more than one principal political committee at a time. Prohibits a person who is both a candidate and an officeholder from having more than one principal political committee. Provides that a candidate who becomes an officeholder is not required to designate a new principal political committee. Provides that a prohibition imposed on a candidate or officeholder by this title applies to the principal political committee of a candidate or officeholder. Prohibits a person from establishing a specific-purpose committee for supporting or opposing only one candidate or assisting only one officeholder. SECTION 3. Amends Sections 252.001, 252.0031, 252.0032, 252.005, and 252.006, Election Code, as follows: Sec. 252.001. APPOINTMENT OF CAMPAIGN TREASURER REQUIRED. Deletes requirement that a candidate appoint a campaign treasurer. Sec. 252.0031. CONTENTS OF APPOINTMENT BY SPECIFIC-PURPOSE COMMITTEE. Deletes the provision that a specific-purpose committee for supporting a candidate for specified offices must include the candidate's name. Makes conforming and nonsubstantive changes. Sec. 252.0032. New title: CONTENTS OF APPOINTMENT BY PRINCIPAL POLITICAL COMMITTEE. Makes conforming and nonsubstantive changes. Sec. 252.005. New title: AUTHORITY WITH WHOM APPOINTMENT FILED: PRINCIPAL POLITICAL COMMITTEE. Makes conforming and nonsubstantive changes. Sec. 252.006. New title: AUTHORITY WITH WHOM APPOINTMENT FILED: SPECIFIC-PURPOSE COMMITTEE FOR SUPPORTING OR OPPOSING CANDIDATE OR ASSISTING OFFICEHOLDERS. Makes conforming and nonsubstantive changes. SECTION 4. Amends Section 252.010(a), Election Code, to make a conforming change. SECTION 5. Amends Section 252.015(a), Election Code, to make conforming and nonsubstantive changes. SECTION 6. Amends Section 253.002(b), Election Code, to delete the provision that exempts a candidate making or authorizing an expenditure for the candidate's own election from the application of this section. Makes conforming changes. SECTION 7. Amends Section 253.031, Election Code, to prohibit a candidate or officeholder from accepting a campaign contribution or making a campaign expenditure at a time when a campaign treasurer appointment for the principal political committee is not in effect. Deletes a provision which exempts an out-of-state political committee from the application of this Section. Makes conforming changes. SECTION 8. Amends Subchapter B, Chapter 253, Election Code, by adding Sections 253.0311 and 253.0312, as follows: Sec. 253.0311. ACCEPTANCE OF POLITICAL CONTRIBUTION BY CANDIDATE OR OFFICEHOLDER. Prohibits a candidate or officeholder from accepting a political contribution in connection with the person's own candidacy or office. Authorizes a candidate or officeholder to accept a political contribution on behalf of the person's principal political committee unless the committee itself would be prohibited form accepting the contribution. Provides that it is a Class A misdemeanor to violate this Section. Sec. 253.0312. CONTRIBUTION OR EXPENDITURE BY CANDIDATE OR OFFICEHOLDER FROM PERSONAL FUNDS. Prohibits a candidate or officeholder from making a political contribution or political expenditure from the person's personal funds in connection with the persons's own candidacy or office. Authorizes a candidate or officeholder to make a political contribution from the person's personal funds to the person's principal political committee. Provides that it is a Class A misdemeanor to violate this Section. SECTION 9. Amend Section 253.033(a), Election Code, to make conforming changes. SECTION 10. Amends Sections 253.034(a)-(c), Election Code, to make conforming and nonsubstantive changes. SECTION 11. Amends Sections 253.035(b), (g), and (h), Election Code, to make conforming and nonsubstantive changes. SECTION 12. Amends Section 253.037(c), Election Code, to replace a reference to the Federal Election Campaign Act with a reference to 2 U.S.C. Section 431 and its subsequent amendments. Deletes an exception. SECTION 13. Amends Section 253.038(a), Election Code, to include a principal political committee among those entities prohibited from making or authorizing a payment from a political contribution to purchase real property or to pay the interest on or the principal of a note for the purchase of real property. SECTION 14. Amends Section 253.041(a), Election Code, to include a principal political committee among those entities prohibited from making or authorizing a payment from a political contribution if the payment was made for personal services rendered by the candidate or officeholder or by the spouse or dependent child of the candidate or officeholder to a business in which the candidate or officeholder has a specified interest, or to the candidate or officeholder or the spouse or dependent child of the candidate or officeholder. SECTION 15. Amends Sections 253.042(a), (b), and (e), Election Code, to make conforming and nonsubstantive changes. SECTION 16. Amends Sections 253.091 and 253.092, Election Code, as follows: Sec. 253.091. CORPORATION COVERED. Provides a citation to the Texas Non-Profit Corporation Act and include the Texas Miscellaneous Corporation Laws Act among the listed statutes. Sec. 253.092. TREATMENT OF INCORPORATED POLITICAL COMMITTEE. Creates Subsection (a) from existing text. Provides that a political committee that has as its only principal purpose accepting political contributions and making political expenditures is not considered to be a corporation under this subchapter if the committee is formed for the express purpose of promoting political ideas and does not engage in business activities, has no shareholders or other affiliated persons who have a claim to the corporation's assets or earnings, and is not established by a business corporation or a labor organization and has adopted a policy under which the corporation does not accept contributions from business corporations or labor organizations. SECTION 17. Amends Subchapter D, Chapter 253, Election Code, by adding Section 253.0931, as follows: Sec. 253.0931. CERTAIN LIMITED LIABILITY ENTITIES COVERED. Provides that limited partnerships and limited liability companies are considered to be corporations under this subchapter and that their members are considered to be stockholders. SECTION 18. Amends Section 253.131, Election Code, by amending the heading and Subsections (b) and (c), as follows: Sec. 253.131. New title: LIABILITY TO PRINCIPAL POLITICAL COMMITTEES. Makes conforming changes. SECTION 19. Amends Section 253.153(a) and (c), Election Code, to make conforming and nonsubstantive changes. SECTION 20. Amends Section 253.154(a), Election Code, make conforming and nonsubstantive changes. SECTION 21. Amends Section 253.1541(b), Election Code, to make a conforming change. SECTION 22. Amends Section 253.155(a), Election Code, to make a conforming change. SECTION 23. Amends and reenacts Sections 253.157(a)-(c), Election Code, to include a law firm among those entities that are prohibited from making a political contribution in excess of $100 to the principal political committee of a judicial candidate or officeholder and to make conforming and nonsubstantive changes. SECTION 24. Amends Sections 253.160(a) and (b), Election Code, to make conforming changes. SECTION 25. Amends Section 253.1601, Election Code, as follows: Sec. 253.1601. New title: CONTRIBUTION TO CERTAIN COMMITTEES CONSIDERED CONTRIBUTION TO PRINCIPAL POLITICAL COMMITTEE. Makes conforming and nonsubstantive changes. SECTION 26. Amends Sections 253.161(a)-(c), Election Code, to make conforming and nonsubstantive changes. SECTION 27. Amends Sections 253.1611(a)-(d), Election Code, to make conforming and nonsubstantive changes. SECTION 28. Amends Section 253.162, Election Code, to make conforming and nonsubstantive changes. SECTION 29. Amends Sections 253.163(a), (b), and (d), Election Code, to make conforming and nonsubstantive changes. SECTION 30. Amends Sections 253.164(a)-(c), Election Code, to make conforming and nonsubstantive changes. SECTION 31. Sections 253.165(a), (b), and (e), Election Code, to make conforming and nonsubstantive changes. SECTION 32. Amends Sections 253.168(a), Election Code, to make a conforming change. SECTION 33. Amends Sections 253.169, Election Code, to make conforming and nonsubstantive changes. SECTION 34. Amends Sections 253.170(a) and (b), Election Code, to make conforming and nonsubstantive changes. SECTION 35. Amends Section 253.171(a), Election Code, to make conforming and nonsubstantive changes. SECTION 36. Amends Sections 253.172(a), Election Code, to make conforming and nonsubstantive changes. SECTION 37. Amends the heading to Subchapter A, Chapter 254, Election Code, as follows: SUBCHAPTER A. RECORD KEEPING; GENERAL PROVISIONS SECTION 38. Amends Section 254.001, Election Code, to delete existing text to make a conforming change. Redesignates Subsections (b)-(e) to Subsections (a)-(d), respectively. SECTION 39. Amends Subchapter A, Chapter 254, Election Code, by adding Section 254.002, as follows: Sec. 254.002. SUBSTANTIAL INTEREST IN BUSINESS ENTITY. Defines "business entity." Sets forth the circumstances which constitute a substantial interest in a business entity. SECTION 40. Amends Section 254.031(a), Election Code, to increase from $50 to $100 the amount of political contributions, loans, and expenditures that must be filed in a report. Provides that each report must contain the difference between the sum of all money in account maintained at financial institutions by the committee required to file the report, the amount of political contribution received by the committee but not deposited in an account, and cash on hand, and each outstanding check or other withdrawal against an account at a financial institution as of the last day of the reporting period. Makes conforming and nonsubstantive changes. SECTION 41. Amends Subchapter B, Chapter 254, Election Code, by adding Sections 254.0312 and 254.0313, as follows: Sec. 254.0312. REPORTING BY OUT-OF-STATE POLITICAL COMMITTEE. Sets forth the information that each report filed under this chapter by an out-of-state political committee must include. Sec. 254.0313. USE OF FICTITIOUS CONTRIBUTORS. (a) Authorizes a political committee to report political contributions as received from fictitious contributors to permit the committee to determine whether information regarding the committee's contributors is being used in violation of Section 254.0401. (b) Authorizes a political committee to list not more than 10 fictitious names that do not represent the names of actual contributors to the committee on each report filed. (c) Requires a political committee that uses fictitious names to subtract the total dollar amount of the fictitious contributions from the total amount of contributions listed under Section 254.031(a)(5) or 254.0312(3). (d) Prohibits the principal political committee of a candidate or officeholder or a specificpurpose committee from attributing more than $1,000 in contributions to the same fictitious contributor in any calendar year. Prohibits a general-purpose committee from attributing more than $5,000 in contributions to the same fictitious contributor in any calendar year. (e) Requires a political committee that uses fictitious contributors to send a list of the fictitious contributors under separate cover directly to the authority with whom the committee's campaign treasurer appointment is required to be filed by the time any report containing the fictitious names is filed. Requires the authority to maintain the list but to exclude it from the public record. Provides that a list submitted under this section is excepted from the requirements of Section 552.021 (Availability of Public Information), Government Code. (f) Prohibits a political committee from using fictitious contributors to circumvent a reporting requirement or a limitation or prohibition prescribed by this title. SECTION 42. Amends Sections 254.034(a) and (d), Election Code, to make conforming and nonsubstantive changes. SECTION 43. Amends Section 254.036, Election Code, as follows: (a) Sets forth the requirements of a report filed under this chapter with an authority other than the Texas Ethics Commission (commission). (b) Provides that each report filed with the commission under this chapter must be filed by direct electronic transfer to the commission using computer software provided by the commission except as provided in Subsections (c), (e), or (f). (c) Sets forth the circumstances in which a political committee is authorized to file a report under Subsections (a) and (b). (d) Sets forth the circumstances in which a political committee is entitled to file a report under Subsection (c). (e) Authorizes specific committees to file reports that comply with Subsection (a). (f) Authorizes an individual required to file a report with the commission in connection with a direct campaign expenditure to which Section 253.062 applies to file a report that complies with Subsection (a). (g) Provides that a report filed under this chapter is considered to be under oath by the person required to file the report and a violation is subject to prosecution regardless of the absence of or a defect in the affidavit. (h) Redesignated from Subsection (c). (i) Redesignated from Subsection (d). (j) Redesignated from Subsection (g). SECTION 44. Amends Section 254.038, Election Code, as follows: Sec. 254.038. New title: ADDITIONAL REPORTS BY CERTAIN POLITICAL COMMITTEES. Requires specified persons to file additional reports during the period beginning the ninth day before election day and ending at 12 noon on the second day before election day. Requires a report filed under this section to be filed electronically unless the person filing the report is permitted to file reports that comply with Section 254.036(a). Makes conforming and nonsubstantive changes. SECTION 45. Amends Subchapter B, Chapter 254, Election Code, by adding Section 254.0381, as follows: Sec. 254.0381. ADDITIONAL REPORT OF CERTAIN CONTRIBUTIONS. Requires a political committee that accepts a political contribution of $5,000 or more to file a report not later than 24 hours after the contribution is accepted. Sets forth the required contents of the report and the required filing procedure. SECTION 46. Amends Section 254.0391(a), Election Code, to make conforming and nonsubstantive changes. SECTION 47. Amends Section 254.041(c), Election Code, to make conforming and nonsubstantive changes. SECTION 48. Amends Section 254.042(a), Election Code, to delete a reference to filing a report via telegram. Deletes existing text to make a conforming change. SECTION 49. Amends Subchapter C, Chapter 254, Election Code, as follows: New title: Subchapter C. REPORTING BY PRINCIPAL POLITICAL COMMITTEE OF CANDIDATE OR OFFICEHOLDER Sec. 254.061. ADDITIONAL CONTENTS OF REPORTS. Provides that the report by a principal committee of a candidate or officeholder include the identification and amount of any executory contract between a person making political contributions over $5,000, or between a business entity in which a person has a substantial interest, and specified entities. Sec. 254.0611. New title: ADDITIONAL CONTENTS OF REPORTS BY PRINCIPAL POLITICAL COMMITTEE OF CERTAIN JUDICIAL CANDIDATES AND OFFICEHOLDERS. Makes conforming and nonsubstantive changes. Sec. 254.062. New title: SEMIANNUAL REPORTING SCHEDULE FOR PRINCIPAL POLITICAL COMMITTEE. Makes conforming and nonsubstantive changes. Sec. 254.063. New title: ADDITIONAL REPORTS OF PRINCIPAL POLITICAL COMMITTEE OF OPPOSED CANDIDATE. Makes conforming and nonsubstantive changes. Sec. 254.064. FINAL REPORT. Makes conforming and nonsubstantive changes. Sec. 254.065. AUTHORITY WITH WHOM REPORTS FILED. Makes conforming and nonsubstantive changes. SECTION 50. Amends Section 254.121, Election Code, to provide that the report by a campaign treasurer of a specific-purpose committee of a candidate or officeholder include the identification and amount of any executory contract between a person making political contribution over $5,000, and a business entity in which a person has a substantial interest. SECTION 51. Amends Section 254.126(a), Election Code, to make a conforming change. SECTION 52. Amends Section 254.128(a), Election Code, to make a conforming change. SECTION 53. Amends Section 254.151, Election Code, to require each report by the campaign treasurer of a general-purpose committee to include the amount of political contributions from a corporation or labor organization under Section 253.100 that exceeds $100 and that are accepted during the reporting period by the committee, the full name and address of the corporation or labor organization making the contributions and the dates of the contributions. Makes conforming and nonsubstantive changes. SECTION 54. Amends Subchapter F, Chapter 254, Election Code, by adding Section 254.1511, as follows: Sec. 254.1511. REPORTS BY PRINCIPAL POLITICAL COMMITTEE OF POLITICAL PARTY; ADDITIONAL CONTENTS. Provides that each semiannual report by the principal political committee of the state executive committee of a political party must list the political contributions and political expenditures made in connection with each candidate or officeholder. Provides that the total amount of political contributions made during the calendar year to the principal political committee of the candidate or officeholder or to another political committee on behalf of the candidate or officeholder and the total amount of political expenditures made during the calendar year for the benefit of the candidate or officeholder must be included in each report by the principal political committee of the state executive committee of a political party. SECTION 55. Amends Section 254.181(a), Election Code, to make conforming changes. SECTION 56. Amends Section 254.182, Election Code, to make conforming and nonsubstantive changes. SECTION 57. Amends Sections 254.183(a), (b), and (d), Election Code, to make conforming and nonsubstantive changes. SECTION 58. Amends Section 254.184, Election Code, to make conforming changes. SECTION 59. Amends Section 254.201, Election Code, to require a person who is a former officeholder or an unsuccessful candidate who has unexpended political contributions after the person's principal political committee files the last report required to be filed by subchapter C to file an annual report for each year in which the person retains unexpended contributions. SECTION 60. Amends Section 254.203(a), Election Code, to make a conforming change. SECTION 61. Amends Sections 254.204(a) and (d), Election Code, to make conforming and nonsubstantive changes. SECTION 62. Amends Section 254.231(b), Election Code, to make a conforming change. SECTION 63. Repealer: Sections 251.005 (Expenditure From Unlawful Contribution), 253.032 (Limitation on Contribution by Out-of-State Committee), 253.036 (Officeholder Contributions Used in Connection With Campaign), 253.100(d) (Expenditures for General-Purpose Committee), and 254.039 (Telegram Report by Certain General-Purpose Committees), Election Code, and Subchapter D (Reporting by Officeholder), Chapter 254, Election Code. SECTION 64. Effective date: September 1, 1999. SECTION 65. Requires candidates and officeholders to designate a principal political committee by September 15, 1999, if they are candidates or officeholders on September 1, 1999. Requires a person to transfer to the committee each asset that the person holds in the person's capacity as a candidate or officeholder within 15 days of designating a principal political committee. Requires the committee to assume each liability of the person within 15 days of the designation. SECTION 66. Makes application of this Act prospective. SECTION 67. Provides that to the extent of any conflict, this Act prevails over another Act of the 76th Legislature, Regular Session, 1999, relating to nonsubstantive additions and corrections in enacted codes. SECTION 68. Emergency clause.